3 new reports on inclusive business

DEVEX
Sophie Edwards

Whether you’re new to the idea and looking to catch up, or you’re an inclusive business aficionado, here are the three latest must-read reports on the subject. Photo by: Sebastien Wiertz / CC BY

As world leaders gathered in New York last month at the United Nations General Assembly part of the focus was on how the Sustainable Development Goals would be implemented a year after their adoption.

Part of that discussion about how business models, and in particular inclusive business models could contribute. Inclusive businesses have commercially viable models that engage people at the base of the economic pyramid as consumers, producers, suppliers and distributors of goods and services, as defined by Business Call to Action, an alliance that works to promote business engagement in the SDGs.

There appears to be a growing interest in the subject of inclusive business — in the last couple weeks alone three new reports were published on this topic. Whether you’re new to the idea and looking to catch up, or you’re an inclusive business aficionado, here are the three latest must-read reports:

1. International Finance Corp.’s “Built for Change: Inclusive Business Solutions for the Base of the Pyramid” (68 pages)

The report features lessons from five in-depth case studies of inclusive businesses funded by the IFC over the past 15 years.

The case studies are bKash, a mobile financial services company in Bangladesh; Bridge International Academies, an education organization founded in Kenya; MicroEnsure, a microinsurance solutions provider working across 15 countries in Africa and Asia; NephroPlus, a health-care services company that provides high quality kidney dialysis care in India; and Probiotech, an agribusiness which produces animal feed for small-scale farmers in Nepal.

The key recommendations outlined in the report are:

1. Plan for scale: Companies need to think about scaling their business models from the start.
2. Focus on low-cost delivery: Low delivery costs, via lean staffing and utilizing technologies, enables companies to reach more customers.
3. Invest in capacity building: A lack of talent and skills among staff can be overcome by investing significantly in staff training.
4. Educate customers: Companies need to put time and funding into educating their BoP customers in order to overcome distrust and doubt about how new services and products can improve their lives.
5. Forge smart partnerships: Forming strong partnerships where both parties benefit are likely to last longer and offer companies opportunities to tap into new ways of reaching BoP customers.

2. Acumen and Skoll Center for Social Entrepreneurship’s “Beyond Dialogue: Building Sustainable and Inclusive Business Models in Partnership with Social Entrepreneurs” (44 pages)

The report outlines key findings and case studies which emerged from a one-day gathering of more than 70 global corporations, social entrepreneurs, and social impact intermediaries ahead of the 2016 Skoll World Forum. The event was designed to help foster partnerships between businesses and social enterprises to create inclusive business.

The report outlines four main types of partnerships between corporations and social enterprises — skills partnerships, channel partnerships, venture partnerships, and knowledge partnerships — and then provides case studies to illustrate each.

Key findings from the case studies include:

1. Having compatible values and a shared vision is vital to effective partnerships between social enterprises and corporations.
2. Before launching a collaboration, the parties involved should take time to build trust, establish expectations and ensure clarity of approach before formally launching a collaboration. Good communication, transparency and an open-minded and flexible approach to each others’ working style and operating timelines is also crucial.
3. Gaining buy-in from stakeholders at all levels within the organizations is necessary to ensure the partnership is a success — don’t just focus on the top decision-makers.
4. Partnerships can and should be encouraged to expand into more complex social innovation networks.

3. Business Call to Action, Deloitte and U.N. Development Program’s “Unchartered Waters: Blending Value and Values for Social Impact Through The SDGs” (63 pages)

This report tackles the issue of how inclusive business models move private sector engagement in the SDGs beyond philanthropic or CSR efforts but ingrain them in the core operations of a business. It makes the case by looking at how five drivers of financial value: generating new revenue, recruiting and retaining talent, increasing supply chain resilience, increasing investor interest and assuring a license to operate, can push companies to look for alignment with the SDGs.

The “how to” guide of sorts is designed for business leaders seeking to implement inclusive models and position themselves for success within the context of the SDGs. It acts a practical toolkit offering information on sectors with inclusive business opportunities and how to design and establish a sustainable inclusive businesses and scale their impact. It also offers advice on how to assess the maturity of an inclusive business model.

Unchartered Waters includes two case studies of inclusive business in the context of the SDGs: the pharmaceutical company Novartis and the international coffeehouse chain Juan Valdez.

The report ends with a list of 10 critical success factors to keep in mind when designing and implementing an inclusive business.